Peloton teases new rower at Homecoming event

Peloton’s annual Homecoming event is for the fans. It’s where the fitness tech company teases new products and drops new features and content. It’s also an opportunity for fans to follow live classes taught by their favorite instructors and attend special panel discussions. This year, the big tease is that Peloton has officially confirmed that an affiliate rower is coming.

The Peloton reveal is more of a teaser and official confirmation than anything else. We don’t know the specs or when it will launch – just that it’s “coming soon”. In terms of design, the rower itself seems to have a similar vibe to the Peloton Tread – sleek, with a minimalist profile and a display to watch lessons on. Rumors about the rower have been circulating since 2018, when Bloomberg reported that Peloton had plans to launch it in 2020. Obviously, 2020 came and went, and not a rower was in sight.

Prior to Peloton’s Homecoming announcement, I spoke with co-founder and chief product officer Tom Cortese about the decision, as well as Peloton’s other Homecoming announcements.

“We’re entering the rowing category, which is highly anticipated and feels like the worst kept secret on Earth, so we might as well talk about it,” Cortese told me via Zoom.

Homecoming is an annual fan event where Peloton announces new features and teases new products.
Image: Platoon

For a home gym, treadmills and bicycles make sense. In the world of fitness technology, many equipment manufacturers are targeting runners and cyclists because they are popular activities. But rowing has traditionally been a bit more niche. Part of that is the space it takes up in your home, and most people don’t grow up rooting. You instinctively know how to run, and learning to ride a bike is often a fond childhood memory. There is a special form that accompanies rowing that you would not know unless someone taught you. And while rowers have been available in gyms for decades, the sport it’s based on has a reputation for being elitist and exclusive.

That said, indoor rowing has become increasingly popular in recent years thanks to boutique and connected fitness classes. Hydrow has made a name for itself as the ‘platoon of rowers’ and there are many other Hydrow-like services currently out there. Apple has included rowing as a category in Fitness Plus. OrangeTheory is another trendy boutique fitness studio that has a lot going for it.

“In a relatively short period of time on the rower, such as a 10- or 15-minute class, you can use 86 percent of the muscles in your body,” Cortese says. “The problem with rowing is it’s a bit inaccessible because the average person like me looks at a rower and I don’t know what to do.”

This video has a little tease from the rower. Blink, and you could miss it.

The idea is that Peloton wants to use its technology, bullpen from popular instructors, and hardware design sensibilities to demystify rowing. It also aligns with another Peloton initiative to expand strength training capabilities. Cortese noted that Peloton will steadily increase its strength training content. At Homecoming, the company announced a new four-week program, hosted by trainer Tunde Oyeneyin, focused on arms and shoulders, which will first be exclusive to the Peloton Guide. The Guide, a camera-based system that lets you check your form on a TV while tracking with your instructors, is Peloton’s first foray into strength-training hardware — and the rower, a combination of cardio and strength, will be its second.

This is all in line with Peloton’s total approach over the years. However, sticking to a game plan is unlikely to calm antsy investors fixated on Peloton’s stock price, especially since the hardware itself is often what analysts are scrutinizing.

Earlier this week, the company posted larger-than-expected losses for its Q3 results. During the conversation, new CEO Barry McCarthy repeatedly told analysts at major banks that while Peloton was good at hardware, “being good at hardware is nowhere near enough.” And while McCarthy is still new to the job, he’s been consistent since he took over subscriptions that are central to his strategy. Chief Financial Officer Jill Woodworth explained that the excess inventory is costing the company. But again, Peloton is launching new hardware.

When asked how the rower fits into Peloton’s new software-first strategy, Cortese says the company “has always been and always will be a subscription company.” That, in turn, means keeping the fan base happy with an ever-growing library of content and features. The goal is to bind users to the community and make sure they never want to leave the Peloton ecosystem.

Inviting members is one of the new features announced on Homecoming that allows you to schedule community workouts from the Bike.
Image: Platoon

So far, the company has been remarkably successful in doing so. Quarter by quarter, the company’s monthly churn rate – the percentage of Peloton users who cancel their membership – remains below one percent. In this most recent quarter, even with an increase in subscription cancellations following news of a price hike, the cancellation rate actually improved to 0.75 percent. The question is whether that will change.

“Our business incentive is to keep you as a subscriber forever,” Cortese says. “We believe there is so much we can do on a daily and weekly basis to continue to change and evolve the cycling experience, the tread experience and now the rowing experience.”

That explains the underlying strategy multiple of the new features announced on Homecoming. For example, Cortese says the company has seen a growing number of users take yoga classes, and lo and behold, Peloton announces it’s adding a second installment to its yoga series “The Approach.” To appeal to hardcore Bike users, Peloton previously launched its Power Zone training program. Homecoming is also getting a new eight-week program called ‘Peak Your Power Zones’.

Just Workout gives users less incentive to leave the app to pick up their other workouts.
Image: Platoon

Peloton also makes it easier for current users to communicate with each other. Members can now schedule workouts directly from the Bike with a new “Invite Friends” feature. Likewise, it also introduces a “Just Train” feature, which means that any uninstructed activity can be recorded in the Peloton app. Meanwhile, the company is adding TalkBack, an accessibility feature to help blind and partially sighted users, to the Tread. The feature talks to these users through the Tread’s user interface. It’s a smart move, as multiple studies have shown that this community is vastly understaffed by current fitness equipment and facilities. According to the American Foundation for the Blind, treadmills should ideally have tactile surfaces, Braille labels for controls, and speech output. So while Peloton could do more according to these guidelines in the future, at least it’s a step in the right direction. It also makes Peloton a more palatable option for those communities and throws the gauntlet on Peloton’s army of copycats to do the same.

But perhaps the one that will most excite Peloton diehards is that the company is reopening its Peloton Studios. In the studios, Peloton films and broadcasts the content, and before the pandemic, it was a place where many Peloton fans visiting New York City would come in to get some facetime with their favorite instructors. The original studio was on 23rd St, but has since moved to a shiny new facility near Hudson Yards. Due to the pandemic, the new Studio has never been open to the public. However, there are no details about the timing.

All of these announcements are a way of reaching new users, keeping those users engaged with the Peloton platform — and giving them fewer and fewer reasons to leave. And if you’re a Peloton fan, I’d say they’re pretty effective. But loyalty has never been an issue for Peloton. The problem is the discrepancy between a company that makes a leading product and its stock price.

When asked about the negative press and the endless speculation about Peloton’s future, Cortese was unimpressed.

“It’s a blunder. It is a moment in time. As long as we stay focused on what we’re good at and continue to create real value in a space that a real consumer really needs, I’m ready to do this for another 10 years.”

If Peloton lingers long, yes. This is an outlier in the same way that Apple had its “lost years”. There is a way forward for the company if its restructuring plan is successful – although it is unlikely to return to its peak value from the pandemic any time soon. In the earnings call, Peloton’s leadership team talked about restructuring goals going forward in 2023 and perhaps 2024. But as long as fans keep going through the ups and downs, Peloton can keep on rowing.

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